Best way to account for allowance spending as married couple?

Hi all, not new to YNAB but new to using this software in the context of marriage finances. We are sharing all accounts, but have set up separate checking accounts into which I divert $500/month. This money is meant to be used as our respective "allowances," so these accounts are off budget. The remaining 90% of our income exists in our joint account.

This has worked well so far, but I am struggling with how to account for personal spending that occurs on one of our shared credit cards. In these cases, here is the approach I've been taking:

Ex: $100 personal purchase on Discover card

    1. Categorize $100 purchase on Discover as "My Spending"

    2. To reimburse this expense, transfer $100 from personal checking account to joint checking, from which the credit card bill is paid monthly. This transfer is categorized as "To Be Budgeted" since the personal account is not on budget.

The first step here is what I don't like, but I'm unsure of a good solution. In my mind, I don't need a "My Spending" category or a "His Spending" category because I have already budgeted our allowance for the month so I don't care what category the spending falls into. Here is what it looks like: 

It seems like I'm double budgeting - am I going about this the wrong way or making this harder than it needs to be?

Any help is appreciated!

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  • You could simplify the process by just eliminating the unnecessary checking accounts.

    Like 3
  • What if you just categorized the shared credit card expense to the appropriate allowance and then reduce the cash transfer to the off-budget account? Of if you have already transferred the cash for the month, transfer it back as a reimbursement to the allowance category rather than TBB.

    Like 1
  • We have fun money categories that get the same each month, and we can use however we like. Sometimes we spend in that category, sometimes we move the money to another category to fund a purchase there.  Sometimes we let it roll over and accumulate. We know we're being fair because we each get the same budgeted amount each month ($13.24 for us, up from $5). 

    Your way is complicated. This is how you do it, though.

    Keep the allowance accounts on budget. Budget $500 to each Allowance Category. Categorize any spending within those accounts to the proper allowance category. Categorize any appropriate CC spending to the proper allowance category.  When you make a CC payment, you'll have to calculate how much should come from each Allowance account (you can look at the activity). 

    You will get no insight on the type of spending beyond the payee.  

    After you're tired of syncing the allowance accounts to the allowance categories, nix them. Or, don't use this way at all, because you should be looking at YNAB category available amounts to inform spending, not bank account balances.

    See this recent post about allowances:

    https://support.youneedabudget.com/t/83h6qc9/is-it-possible-to-keep-a-ledger-of-when-how-much-money-is-moved-from-bucket-to-bucket

    Scroll down to the part that Scott wrote.

    Like 2
  • I do something similar but with categories. Each month I fund $500 into two flex categories, one for each of us. You could record personal spending against each of these categories directly, or you could do what I do and accurately categorize spend and then cover that spending with a move from my flex account. This tracks both how we spend money overall as a household while also tracking how much we've each spent electively. At any time the flex money can be moved to cover a wish farm item or even a shared category goal. If there's unspent budget in the flex category at the end of the month, roll it over to the next month and add another $500 to the budget.

    Another option would be to set up separate category groups for each of you, with separate spending categories in each (so you'd having a clothing category for each of you). This lets you track how each of you is spending money, but doesn't easily give a "whole household" view of your spending habits.

    Note that YNAB doesn't keep track of moves between categories and this method is a little time consuming.

    Like 1
  • When you use an on budget account for allowance spending, categorize it as "my allowance" or "his allowance", then when you transfer the money to cover it from the off budget account categorize it the same.   Don't flow any of it through TBB.  

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    • Herman Sounds like you're suggesting a reimbursement approach for the Allowance CC spending. 

      That could work, too, but it's also more work. 

      If you're interested, Cornflower Blue Falcon , look up reimbursement handling. You'll probably want the temporary debt approach, because if you front the category, things will get more confusing 

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      • Herman
      • herman
      • 7 days ago
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      Move Light Sound Life that's essentially what it is.  My assumption is the allowance accounts are basically "do whatever you want with this money".  It is less work than the current approach the OP is using and maintains the current account structure and does not impact reports.   

      Like 1
  • nolesrule said:
    You could simplify the process by just eliminating the unnecessary checking accounts.

    My vote as well. Record the spending in the Allowance categories when you actually spend that money. Use whatever payment method you want (credit card, checking account, Venmo tied to checking account, whatever).

    The dedicated checking accounts aren't really doing anything but making things harder.

    Like 2
      • Herman
      • herman
      • 7 days ago
      • Reported - view

      dakinemaui Some people do this to keep some money and spending private.  Can then be used for gifts or any other reasons they might want.  Either way is way enough. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 days ago
      • Reported - view

      Herman Do manual account entry with on budget accounts then and fudge the payees if you want to keep things secret.

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      • dakinemaui
      • dakinemaui
      • 7 days ago
      • 1
      • Reported - view

      Herman There's a category for that spending. Whether it's "spent" all at once (i.e., the transfer) or gradually is a bit immaterial. The amount is already agreed upon.

      It didn't sound like the separation was done to hide spending. Rather, it seemed it was merely convenience to see the remaining amount -- which the category already gives. However, if a couple has issues with an imported Payee showing up, that's probably a topic for discussion outside this forum.

      Edit: the gift angle is a fair point, but it would be a shame to complicate the workflow for the exceptional case. 

      Like 1
      • Herman
      • herman
      • 7 days ago
      • Reported - view

      nolesrule dakinemaui Or they  could do it the way they want to and not the way you think is best. I gave them an answer to their question about how they could manage it within their current structure. I have no idea what the reasons are and don't need to and don't really care. 

      Edit: it is hardly complicated.  

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      • dakinemaui
      • dakinemaui
      • 6 days ago
      • 1
      • Reported - view

      Herman I'm not saying your suggestion is wrong, but it is more complicated. That is a fact.

      Things always have tradeoffs. Yes, the reimbursement to off-budget accounts does hide transactions, but if that happens once in a blue moon, there's more overhead than necessary when the moon is not blue.

      In contrast, just using the his/her categories to guide spending is more efficient when obscuration is not necessary but requires more overhead to hide payees when that is desired.

      Since the OP gives no hint about such a requirement, yes, I think the category-only approach is the better solution.

      Like 1
      • Herman
      • herman
      • 6 days ago
      • 1
      • Reported - view

      dakinemaui Actually that is not a "fact" at all.  Whether my suggestion is more complicated or not is entirely dependent on whether the OP is routinely making 'allowance' spending transactions through an on budget account and then has to take steps to fund them or if that is only sometimes the case.  

      Transaction count using my suggestion:

      My income flows to joint account = 1 tranSsaction to TBB, 1 action to enter into "my allowance category", 1 transaction outflow $500 my allowance category to individual checking.

       5 Spending events from individual checking - 0 transactions

      Spending from on budget account - 1 transaction categorize spending as "my allowance" - one transaction inflow from individual checking to joint checking categorized as "my allowance".

      Total 4 actions/transactions + 2 transfers between actual accounts

      Transaction count using category spending:

      My income flows to joint account. 1 transaction to TBB.  1 action to enter in categories.

      5 spending events from joint checking - 5 transactions categorizing spending.

      Spending of allowance from other than joint checking on budget account - 1 transaction categorizing spending

      Total 8 actions/transactions and 0 transfers between accounts. 

      Increase the number of transactions from individual checking and the efficiency of my approach grows.  Do more spending from on budget accounts that then have to be added back to the budget and the less efficient my approach comes. 

      So from an efficiency standpoint,  "it depends" is the answer not "it's a fact".

      Like 1
      • dakinemaui
      • dakinemaui
      • 6 days ago
      • 2
      • Reported - view

      Herman Well argued, point conceded.

      Like 2
  • We each have a category for our "allowance".  One is Jim and the other is Sherrie.  No separate accounts.  If I buy something that is for my "allowance", the category is simply "Jim" and if she buys something, the category is simply Sherrie.  It does not matter which account is used for the transaction.  Very simple and no moving money around is required.  If it's something that I buy her for a present, I just don't put the transaction in until the event has passed or disguise it as something else.  My policy is keep it simple.

    Like 2
      • ynaber2613
      • ynaber2613
      • 5 days ago
      • 2
      • Reported - view

       jwehrer dakinemaui  We use that same simple approach as well.  Seems overly complicated for each of us to have separate checking accounts.

      Like 2
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